The Market for Organic Cabbage Is Represented by Q^D =

Multiple Choice

The market for organic cabbage is represented by Q^D = 1,200 - 75P and Q^S = 425P - 300, where P is the price per head of cabbage and Q measures the number of heads of cabbage per week. Suppose the price of organic fertilizer falls, making sellers willing to sell 100 more heads of cabbage per week at every price. What happens to producer and consumer surplus as a result of this change?

A) Consumer surplus increases by $196.50, and producer surplus increases by $36.97.
B) Consumer surplus increases by $196.50, and producer surplus increases by $42.37.
C) Consumer surplus remains unchanged, but producer surplus increases by $93.02.
D) Consumer surplus increases by $296.50, and producer surplus increases by $36.97.